In the past decade, fashion-forward retailers, such as
Target, have embraced design as a strategic tool. Almost
every other major big box has followed suit, including K-Mart, Sears, Staples and Wal-Mart. Private label products
are no longer “me-too” commodities sold on value pricing,
but rather “premium” products, traffic drivers and sometimes even best sellers.

Following are some of the ways in which industrial
design affords those who use it effectively a competitive
advantage.

1. Innovative industrial design creates value and
raises the price that consumers are willing to pay.
In the past decade, consumers have shown that they
are willing to pay more for an object that not only
works well, but also is beautiful. This is in contrast to
the prevailing wisdom of the 1980s and 1990s that
consumers were only driven by features and price.
Virginia Postrel explains this well in her book, “The
Substance of Style.” She writes, “Target introduces
a line of housewares developed by architect-designer
Michael Graves. Few Target customers have heard of
Graves, but his playful toaster quickly becomes the
chain’s most popular, and most expensive, model.
A year later, Target doubles the number of Graves
offerings, to more than 500 products. Over time, it
adds even more.” Clearly, consumers will pay more
for products that stand out.

2. Innovative industrial design creates desire. Whenwe think of innovative products, we think of prod-ucts that arouse the emotions. The Porsche Boxster,Apple’s iPhone and Motorola’s Razr cell phone wereall designed by people thatunderstand how to appeal tothe consumer’s emotions. Infact, recent research suggeststhat emotions are the drivingforce behind most purchasingdecisions. If a product does not

first connect emotionally with many consumers, they
are not as likely to consider other benefits, such as
its functional merits or how it fits into their budget.
Desire leads directly to higher sales. If you’ve done
everything else right, desire can sometimes lead to
market domination. By summer 2005, Apple’s iPod
had snagged an estimated 80-percent market share.
Clearly, innovative design can increase your bottom
line.

3. Innovative industrial design creates a buzz! Think
of a product that you lust after. Can you remember
the first time you saw that product in the flesh?
Perhaps it’s the Motorola Razr, a slim and sexy cell
that topped the sales charts in the U.S. and Europe
a few years ago. You are having dinner with your
brother as he casually slips out his new Razr to check
his voicemail. “When did you get that?” you ask.
“Can I see that?” As he hands it over, you say “wow”
a little too loudly. You get some stares from other
tables. In your excitement over how slim and sexy
this electronic beauty is, you’ve created a stir. You’ve
inadvertently created “buzz” for this fine creation of
the folks at Motorola. If you keep this up, they may
be able to fire that expensive New York ad agency.
This is the power of having not just good design, but
design that is so unique that it grabs you on an emotional level.

4. Innovative industrial design attracts high quality
customers. An investment in design attracts customers with more disposable income. The average
income of a Target customer is $50,000 per year
versus $35,000 per year for a Wal-Mart customer.
A major part of Target’s growth strategy is to differentiate itself through design. In the past decade
or so, Target has gone from one industrial designer
to 50-plus industrial designers in house. They have
also hired a host of well-known designers, such as
Michael Graves, Phillipe Starck, Todd Oldham and
Isaac Mizrahi, each of whom has a fleet of designers
working for them. From 2000 to 2005, the retailer’s
revenues grew from 14-27 percent per year. Obviously, Target feels that its investment in design is
helping it reach out to the affluent customers who
are fueling its growth.